Cloudbooks: Market Analysis and Forecasts

Transcription

1 Cloudbooks: Market Analysis and Forecasts

2 SECTOR REPORT Cloudbooks: Market Analysis and Forecasts September 2011 Caroline Gabriel Lead Analyst Matt Lewis Research Director ARCchart 78 York Street London W1H 1DP United Kingdom Tel: Fax:

3 ARCchart is an independent research and consulting firm focusing on all aspects of the wireless communications sector. Based in London, ARCchart s depth and breadth of analysis provides a global perspective on wireless technology and industry developments. Combining original thinking with exceptional knowledge and experience, ARCchart assists clients in making sound commercial decisions about technologies, market strategies and competitive positions. ARCchart s strategic advice covers all aspects of the wireless value-chain - ranging from semiconductors and WLANs to network operators, handsets and mobile applications. This report draws upon research and analysis conducted by all the ARCchart information groups. Use of this report by any third party for whatever purpose should not, and does not, absolve such third party from using due diligence in verifying the report s contents. Any use which a third party makes of this document, or any reliance on it, or decisions to be made based on it, are the responsibility of such third party. ARCchart, its affiliates and representatives accept no duty of care or liability of any kind whatsoever to any such third party, and no responsibility for damages, if any, suffered by any third party as a result of decisions made, or not made, or actions taken, or not taken, based on this document. ARCchart does not make investment recommendations, in this report or otherwise, and nothing in this report should be interpreted as an opinion by ARCchart either on market forecasts or on the prospects of specific companies.

4 Executive Summary As content and applications shift into the cloud and communications and computing merge into one gadget, an increasingly mobile lifestyle is demanding a new and innovative device form factors. Alternative approaches to the traditional PC and handset will play their part, but more radical designs are also emerging - the newest of these is the cloudbook. Pioneered mainly by Google with the Chromebook, the cloudbook is a stripped-down, highly mobile device with a large screen, geared to doing almost everything in the cloud rather than locally on the device. This fits in with various trends in user behaviour and also appeals to enterprises looking for greater control and cost efficiency in the mobile world. However, there are rival form factors emerging, such as tablets and Intel s ultrabook, so the cloudbook will need to differentiate itself clearly on functionality and price in order to carve out a place in the market. This report is based on interviews with device OEMs, retailers and resellers and provides a comprehensive analysis of the new cloudbook device segment, providing insights into the anticipated evolution over its first five years and the impact it will have on related markets, from notebooks to netbook to tablet devices. The factors that will drive cloudbooks and the competitive pressures it will face are also discussed in order to develop a picture of its place in the connected devices landscape. The key topics analysed are: The evolution of the cloudbook and how it differs from the form factors The market changes that make a new cloud-based form factor necessary The key attributes of the cloudbook s software platform, and how these will evolve Analysis of the first commercial cloudbooks and their bill of materials The target BOM and pricing levels to make the cloudbook into a mass-market product Customers bases and channels to market for the new devices Expected cloudbook growth and the cannibalisation impact it will have on rival form factors such as netbooks. i

5 We anticipate that sectors such as the enterprise and budget users will drive the cloudbook from a low base in 2011, to an 80 million unit market by 2015, achieving CAGR of 84% over this period, which is comparable to the growth of netbooks during their peak. Some of this success will come at the expense of netbooks, which we forecast will disappear as a category, but cloudbooks will also steal share from conventional notebooks, even though the latter remain the largest class of end user connected device (excluding phones) in The cloudbook is geared towards a cloud-oriented world and the report makes comparisons with previous thin client efforts to assess the demand for such a device. The first major commercial cloudbooks - Samsung and Acer devices based on the Google Chromebook platform - are analysed in terms of cost, feature set and competitive landscape. Other approaches to the cloudbook concept, and the likely response of Microsoft, Intel and other key players, are also considered. Comparisons with the Intel ultrabook idea are also included. The user experience and apps ecosystem are vital to the performance of the cloudbook, with the rise of HTML5 and browser interfaces central to this. Google hopes its early move with the Chromebook will drive its own browser to the top of the market but it knows Windows cannot be forgotten overnight, so virtualisation partners such as Citrix and VMware also emerge as important players. Turning early interest into commercial success will rely on a list of critical success factors, which are analysed in turn. In particular, a strong user experience, changes in mobile data pricing and security are key factors. Getting the cloudbook s retail price-point right is also of fundamental importance. The price and BOM of the first Chromebooks is high for the mass-market, and the report addresses this in detail together with key trends in components and costs. ii

6 Table of Contents A. INTRODUCTION... 1 What is a cloudbook?... 1 A.1 Origins of the cloudbook... 1 The network computer... 2 The netbook... 2 A.2 Cloudbook market drivers... 3 Interest in promoting the thin client... 3 Growth of connected devices... 3 Web players and device manufacturers... 4 Providers of web services... 4 Device manufacturers... 4 Emerging markets... 4 B. DOES THE MARKET NEED A CLOUDBOOK?... 5 Lessons from the smartbook... 5 B.2 SWOT analysis... 6 B.3 The enterprise versus consumer adoption... 8 C. THE NEW DEVICE LANDSCAPE C.1 Tablets and Cloudbooks C.2 Cloudbook feature set Form factor Storage Display Connectivity Operating system and UI Power iii

7 Feature set outlook C.3 The main cloudbook players Google Intel HP Microsoft Others Outlook C.4 The Chromebook - the first cloudbook CPU options C.5 A cloudbook challenger the ultrabook Intel s mobile strategy MeeGo D. THE SOFTWARE PLATFORM D.1 Elements of the cloudbook environment Software The browser Apps App Store Virtualisation D.2 Trends pushing towards a browser-based OS Limitations of the Fat OS Move towards lightweight Linux The rise of HTML Challenge to Flash and Silverlight D.3 Cloudbook OS players Google Linux distributions webos MeeGo Microsoft Cloud OS market share iv

8 E. CRITICAL SUCCESS FACTORS E.1 New connectivity models Breakdown of connectivity options E.2 Syncing and login E.3 Security E.4 The self-improving device E.5 Price E.6 Flexibility E.7 Openness F. FORECASTS F.1 Methodology F.2 Cloudbook shipments F.3 Portable computing device shipments Notebook and tablet shipments Netbook and ultrabook shipments F.4 Impact on other device types Cannibalisation of the notebook market Cannibalisation of netbook market Non-cannibal cloudbook sales G. BOM, PRICING & COST OF OWNERSHIP G.1 Factors affecting pricing Limited hardware differentiation Uptake of cloud services Subsidy and data plan Lack of subsidy Connectivity challenges OEM push for higher margins Comparison with the ultrabook G.2 Target pricing Initial pricing Cost of ownership Retail price sweet spot v

9 G.3 BOM Analysis Memory and motherboard Display Security Battery Connectivity BOM comparisons Strategies for supporting cloudbook pricing BOM evolution H. CHANNELS TO MARKET H.1 Software sells hardware Potential for conflict Google Apps I. CONCLUSION vi

10 List of Table & Figures Table 1 - Comparison of the key characteristics of tablets and cloudbooks Table 2 - Specifications of the first commercial Chromebooks Table 3 - BOM analysis comparison for cloudbooks and selected portable gadgets Table 4 - Cloudbook component suppliers and pricing trends Figure 1 - Shipment of non-phone portable devices with embedded cellular and Wi-Fi: Figure 2 - Cloudbook SWOT analysis... 6 Figure 3 - Features driving purchase decision for Early Adopters, Mainstream & Budget consumers... 8 Figure 4 - Cloudbook purchasing pattern for enterprise and consumers: Figure 5 - Ultrabook purchasing pattern for enterprise and consumers: Figure 6 - Portable device landscape forecast: Figure 7 - Chromebooks from Samsung and Acer Figure 8 - Asustek s UX21 ultrabook Figure 9 - Browser market share and HTML5 penetration: Figure 10 - Cloudbook OS market share: Figure 11 - Cloudbook market breakdown by connectivity options supported: Figure 12 - Cloudbook shipments: Figure 13 - Portable device landscape forecast: Figure 14 - Loss of notebook sales to new device categories: Figure 15 - Loss of netbook sales to new device categories: Figure 16 - New sales of tablets and cloudbooks: vii